Chinese state media yesterday announced a slew of confessions following probes into recent stock market gyrations, including from a detained reporter who admitted to spreading false information that caused “panic and disorder”.

A stockmarket rout is set to add to the losses of China’s banks, already grappling with slowing profit growth from a surge in bad loans and a series of interest rate cuts, by curbing robust growth in their fee-generating business.

Faced with a renewed stock market slide that has wiped out €4.4tn in trading value, China is again on the prowl for scapegoats.

Securities houses are learning the hard way what it means to be a tool of the state. The largest brokerage houses in China were beneficiaries of the stock bubble.

China’s industrial growth slowed further in July as Beijing clamped down on a credit boom, bolstering expectations it will ease monetary policy to shore up its economic expansion.